Game theory dining

29 August 2015

This past Wednesday I had dinner at Blu - a restaurant that’s adopted a “pay what you want” pricing model. Customers have an incentive to underpay the final check so I was curious to see how Blu handled it throughout dinner. I noticed three tactics they used to get people to pay fairly and am sure they utilized a bunch more that I didn’t even notice:

Anchoring: Before sitting down to eat the waitress explained that it was pay what you want and most of the dishes are estimated to be priced between $10 and $12. This sets the expectation early so if you do decide to pay less you’re making an explicit decision to underpay.

Reminder: At the end of the meal we were told how many dishes we ordered. This was also helpful but I can’t help but think that this is a way to give you an estimate of how much you should pay - especially when paired with the fact that the expectation is $10 per dish - a very easy number to multiply.

Shame: I found this the most interesting one. Instead of giving you a blank receipt and allowing you to write what you want to pay you have to tell the waitress what you want them to charge. This forces you to explicitly vocalize your payment to another person rather than quickly writing something and slinking away. And no one wants to be judged as cheap face to face so we’re encouraged to pay well.

I’m a huge fan of behavioral psychology experiments that shed some light on the way our minds work and it was a great experience to partake in one. I only wish I could have spotted more behavioral cues that I’m sure they employed.